Open petition to Binance for reimbursement of USTC holders

General
1

Hello,
I have written a draft of a petition that we could post on change.org, avaaz.org or any other platform that could be signed by UST investors and the community at large in order to receive a refund directly from the various exchanges.
My English is not excellent, so feel free to make corrections and suggestions.

Title: Open petition to Binance for reimbursement of USTC holders

Text: The cryptocurrency sector is full of risks and scams. In the last year alone there have been failures of exchanges like FTX, investment funds like 3AC, CeFi like Celsius, BlockFi and Voyager, and blockchain projects like Terra (Luna), which seems to have been the one that started the domino effect.
When an investor approaches such an industry, he has to take into account that he can lose everything he invests. However, in the specific context of the blockchain Terra (now Lunac) and its algorithmic stablecoin UST (now USTC), almost all investors have been fooled even by large exchanges such as Binance.
In fact, Binance introduced staking/earning support for UST just a month before the collapse without adequately informing investors; practically no investor could have imagined a sudden and immediate collapse of a stablecoin that should not have had this name given its behaviour.
In the first weeks after the collapse, there were proposals both on twitter and on the project forum to provide a refund to the small USTC investors which could have covered 99% of them (total between 1-1.5 billion dollars) using LFG funds.
Unfortunately, more than 7 months have passed and no investor has received any reimbursement from LFG, which declared itself unable to use its funds.
Moreover, on 21 May, immediately after the incident, a small Brazilian exchange already refunded USTC holders.
As the USTC community we are asking Binance and CZ, since they represent almost the entire cryptocurrency industry, to take the first step and reimburse their small USTC investors (the exact number is unknown) using the emergency fund for these purposes.
In this way, other exchanges will also follow suit by reimbursing their UST investors and justice will be done as well as restoring confidence in the market.

1 Like
2

I commend your efforts but no one is even replying to this cause no one wants to irk Binance anymore. We already tried to do the burn tax changes but they wouldn’t have it.

Instead they directed is to the IRI fund. Maybe you can apply to that fund and make your case over there?

I see that you have found that this SAFU fund exists. So they had made a promise back in 2018 to refund if such a situation arises.

Just that - I don’t know whether this is the best time to move this proposal. They already seem to be slightly unhappy with us and wants us to fix the burn tax first.

3

Thank you for your reply.
My goal is to collect as many signatures as possible with the petition in order to convince Binance with good manners.
If that is not enough, the lawyers will take care of it with class actions (some already in progress 1 and 2).

P.S. It does not bother me so much if I lose money in a speculative NFT project or in a seemingly innovative blockchain like Terra, Solana, whereas it bothers me to be cheated as in this case by a stablecoin like UST or an exchange like FTX.

5

I am disappointed because I have confirmed many times that the IQ of community members is below the global average.

Even after 10 years of incineration, the price of LUNC and USTC will not go up. You don’t understand the mechanism by which market prices are formed at all.

For example, Baby Doge Coin burned 45% of its total coins after it was issued. It was astronomical in US dollars, but the current coin price is not much different from when it was issued.

There’s already few cases but people don’t learn. There are a lot of people who are good at getting scammed and scammers withdraw money from your wallet very easily.

If you don’t want to learn economics, listen to people who are good at economics. Don’t try to exchange opinions with them, if your knowledge level doesn’t match, you can only play a role in lowering their level.

This is not an insult to you. It’s a fact, it’s the logic of the world, and it’s something to admit.

2 Likes
8

Nothing is impossible. We should at least try, as it costs the community nothing, just signing a petition.
After the collapse of Terra (LUNAC) there are two main problems to recover the trust of the crypto community:

  1. Blockchain Terra (LUNAC): restoring development and vision that should help recover value in the long term.
  2. USTC: compensate small holders (not whales) and then destroy the circulating to restore the peg and thus the value of LUNAC.

The two problems are interlinked, but different. The USTC holders were duped by both Terra and the exchanges, which approved the project by supporting Anchor’s staking/earning mechanism. As I wrote in my first post, the cryptocurrency industry is full of risks and scams, but a stablecoin should not have that name if it is not stable.
Once the small holders of USTC are fully compensated by the exchanges, trust in the project will be restored and the community will be able to continue with the roadmap to restore the value of blockchain Terra that was unique.

9

The most important thing is to repeg USTC, if this happens, LUNC will go up also. Community must unerstand this, but many proposals are made to recover prize of LUNC

2 Likes
10

This will not solve the main problem of 1.0 - repeg. No one is going to spend money for nothing, only invest (especially a runaway Do Kwon).

11

I don’t have the exact figures, but let’s assume that $1.5 billion is needed to cover 99% of the small USTC holders. This sum together with another $1.85 billion are in the LFG funds. So altogether $3.35 billion can be destroyed, which is about 34% of the total supply of $9.8 billion of USTC. LFG funds can be used for other things if small investors are reimbursed by the exchanges
However, the most important thing is to do justice and restore confidence in Terra project and the cryptocurrency market, and to do this, investors, at least the small ones, in a stablecoin that was not.

12

The exchanges sell $1 to ust, as a fixed price, and they keep the cash in their safes. reimbursement should be made 1:1 before the accident. give 1ust : 1 ustd or busd

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Of course, otherwise it is not a reimbursement.

14

No one will spend money on this, because ust can be bought MORE cheaper on exchanges. Dreams. All 1.0 mcap smaller than $1.5 billion (this enough for repeg even).

15

Are you reading other users’ posts? Exchanges will have to refund users or there will be many class actions, such as the one already underway against Binance.us. Once an exchange has completed the reimbursement of its USTC users, then it can burn/destroy the corresponding USTC.
1-1.5 billion dollars is the estimated amount needed to compensate all small USTC holders and thus the amount that exchanges will have to pay.

16

I don’t think it’s possible to win a lawsuit against Binance (or Coinbase). Korean exchanges, maybe. It would be nice, but it’s just a dream.

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17

Noe continue other stablecoin trade dex platforms same to ust and a new crash like ust may re-do not commit it

18

Why? Do you have any evidence to support your claim? Are you a lawyer? I don’t think so.

19

It does look like they have posted something related to the SAFU Fund here:

As far as I understood from the post, the other exchanges who are holding USTC need to publish their wallet addresses so that the fund can be transferred to them.

The fund is still at 1 billion cause I think none of the other exchanges (which are not very legit) have that Insurance Fund wallet.

Binance must have told them to do it when they themselves did it and they have not done it all this while, and never offered it to their customers, like Binance did.

So no one is eligible for that fund.

This is my guess, but I may not be very far off from the truth.

Coming to the litigation part:

We can definitely go after Binance and everyone else as well (like TFL) who might be withholding our USTC funds.

Cause as far as I understand, after the crash, people got back 5 bucks after investing 100,000 (as an example). So this is clearly a case of embezzlement, on the part of the exchanges, and other entities involved, like TFL, cause they all promoted Luna and asked everyone to invest in it.

We can proceed with this, if we have a legal representative who is gonna agree to take it up.

I have already submitted a plan/prop to Prof. Kim to review, which makes provisions to appoint a legal counsel for the community.

We will probably need to wait a little bit before that is passed, and then we can take this up. We do have other cases to take up before this one. But this one is extremely important and I agree with you on that.

I am keeping a bookmark on this topic so that I can revisit this in a week or so, once my prop is up for discussion here on Agora, because my proposal needs to pass first to allow this proposal to be taken up by us.

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20

I agree with you and I subscribe your proposal.

I’m sorry, but I don’t know what you’re talking about.

Which one?

Binance SAFU fund update: Topping up SAFU to $1B | Binance Blog

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21

Since I have submitted my proposal for review, there is little I can talk about it currently, before Prof. Kim gives me feedback for it.

There is a case included in my plan - one that the community also would like resolution for most probably. That completely depends on them. But it is much smaller a case compared to this.

This is a big one, and I will research and prepare for this in advance.

I am not saying that we will go after Binance like they are criminals - that is never gonna be the intention. But we will do everything necessary and possible in our power to make customers whole again and restore whatever funds they lost during the crash.

Many cases are already running against DK, TFL and Binance. So there is nothing different or new that we will be doing even if we take this forward.

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if we run this case through governments their exchanges may be banned within countries or we will help get the trusted label for compliance
evidenced class action with multiple people, different countrys

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Thank you for your commitment. Please continue to keep us updated.
I will create the petition on change.org within a week and post it in the first post of this thread.

1 Like